{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/323/740/#35-subsequent-measurement","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"323","topic_title":"Investments—Equity Method and Joint Ventures","subtopic":"323-740","subtopic_title":"Income Taxes—Proportional Amortization Method","section":{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":"Proportional Amortization Method","heading":null,"paragraphs":[{"citation":"323-740-35-1","para":"35-1","html":"
This guidance addresses the methodology for measuring an investment that is accounted for using the proportional amortization method.
","snippet":"This guidance addresses the methodology for measuring an investment that is accounted for using the proportional amortization method.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4b5e1e90b2570172c60ef115aafb6f045d30dea378d4d9c3aedb931d8c3638a7","downloaded_from":"2026-09-09T23:41:22.838Z","last_downloaded_at":"2026-09-09T23:41:22.838Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477283","source_sha256":"d9cc81a7641ff5c2af5a18ac3cd9484fbe078285e9079e1978b13a0b9c60fc75"}},{"citation":"323-740-35-2","para":"35-2","html":"
Under the proportional amortization method, the investor amortizes the initial cost of the investment in proportion to the income tax credits and other income tax benefits allocated to the investor. The amortization amount shall be calculated as follows:
  1. a
    The initial investment balance less any expected residual value of the investment, multiplied by
  2. b
    The percentage of actual income tax credits and other income tax benefits allocated to the investor in the current period divided by the total estimated income tax credits and other income tax benefits expected to be received by the investor over the life of the investment.
","snippet":"Under the proportional amortization method, the investor amortizes the initial cost of the investment in proportion to the income tax credits and other income tax benefits allocated to the investor. The amortization amou…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a397150800bbd0648b628047375d5927172ef214b9703656d78d1284c23434cb","downloaded_from":"2026-09-09T23:41:22.838Z","last_downloaded_at":"2026-09-09T23:41:22.838Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477283","source_sha256":"d9cc81a7641ff5c2af5a18ac3cd9484fbe078285e9079e1978b13a0b9c60fc75"}},{"citation":"323-740-35-3","para":"35-3","html":"
Example 1 (see paragraph 323-740-55-2) illustrates the application of the proportional amortization method to a limited liability investment that generates income tax credits and other income tax benefits from a tax credit program. Example 2 (see paragraph 323-740-55-11) illustrates the application of the proportional amortization method to a limited partnership investment that generates income tax credits, other income tax benefits, and non-income-tax-related benefits from a tax credit program.
","snippet":"Example 1 (see paragraph 323-740-55-2) illustrates the application of the proportional amortization method to a limited liability investment that generates income tax credits and other income tax benefits from a tax cred…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f45021038f349d06ba37a54ccebf50b0e98c4e5a0e8c1e8d94b5da7ff5ffd5d7","downloaded_from":"2026-09-09T23:41:22.838Z","last_downloaded_at":"2026-09-09T23:41:22.838Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477283","source_sha256":"d9cc81a7641ff5c2af5a18ac3cd9484fbe078285e9079e1978b13a0b9c60fc75"}},{"citation":"323-740-35-4","para":"35-4","html":"
As a practical expedient, an investor is permitted to amortize the initial cost of the investment in proportion to only the income tax credits allocated to the investor if the investor reasonably expects that doing so would produce a measurement that is substantially similar to the measurement that would result from applying the requirement in paragraph 323-740-35-2.
","snippet":"As a practical expedient, an investor is permitted to amortize the initial cost of the investment in proportion to only the income tax credits allocated to the investor if the investor reasonably expects that doing so wo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5aeb97b693ab4232d82b9766f06a85af7046c9338e562f2cddb8424031d47c5b","downloaded_from":"2026-09-09T23:41:22.838Z","last_downloaded_at":"2026-09-09T23:41:22.838Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477283","source_sha256":"d9cc81a7641ff5c2af5a18ac3cd9484fbe078285e9079e1978b13a0b9c60fc75"}},{"citation":"323-740-35-5","para":"35-5","html":"
Any expected residual value of the investment shall be excluded from the proportional amortization calculation. Non-income-tax-related benefits received from operations of the limited liability entity shall be included in pre-tax earnings when realized or realizable. Gains or losses on the sale of the investment, if any, shall be included in pre-tax earnings at the time of sale.
","snippet":"Any expected residual value of the investment shall be excluded from the proportional amortization calculation. Non-income-tax-related benefits received from operations of the limited liability entity shall be included i…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:10e9e1ffa180e2418ef53c48317a510c3332d048a0590e738ffec8c5ab9af7ea","downloaded_from":"2026-09-09T23:41:22.838Z","last_downloaded_at":"2026-09-09T23:41:22.838Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477283","source_sha256":"d9cc81a7641ff5c2af5a18ac3cd9484fbe078285e9079e1978b13a0b9c60fc75"}},{"citation":"323-740-35-6","para":"35-6","html":"
An investment shall be tested for impairment when events or changes in circumstances indicate that it is more likely than not that the carrying amount of the investment will not be realized. An impairment loss shall be measured as the amount by which the carrying amount of an investment exceeds its fair value. A previously recognized impairment loss shall not be reversed.
","snippet":"An investment shall be tested for impairment when events or changes in circumstances indicate that it is more likely than not that the carrying amount of the investment will not be realized. An impairment loss shall be m…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:65c3583b2f3c41fd1a88b201e15e1c2b5da616f2bfb03e6d5a9fe8519c7965f0","downloaded_from":"2026-09-09T23:41:22.838Z","last_downloaded_at":"2026-09-09T23:41:22.838Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477283","source_sha256":"d9cc81a7641ff5c2af5a18ac3cd9484fbe078285e9079e1978b13a0b9c60fc75"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2eaeb1c1bc80019dec39c839d6eab4d3f21085dbd2109bb801fba147acbe6637","downloaded_from":"2026-09-09T23:41:22.838Z","last_downloaded_at":"2026-09-09T23:41:22.838Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477283","source_sha256":"d9cc81a7641ff5c2af5a18ac3cd9484fbe078285e9079e1978b13a0b9c60fc75"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:400f40279df216cfc5d1b680b8d6270713ef79f5eb6a244c91d661b0a1c642ec","downloaded_from":"2026-09-09T23:41:22.838Z","last_downloaded_at":"2026-09-09T23:41:22.838Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477283","source_sha256":"d9cc81a7641ff5c2af5a18ac3cd9484fbe078285e9079e1978b13a0b9c60fc75"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:400f40279df216cfc5d1b680b8d6270713ef79f5eb6a244c91d661b0a1c642ec","downloaded_from":"2026-09-09T23:41:22.838Z","last_downloaded_at":"2026-09-09T23:41:22.838Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477283","source_sha256":"d9cc81a7641ff5c2af5a18ac3cd9484fbe078285e9079e1978b13a0b9c60fc75"}}